WASHINGTON — The International Monetary Fund (IMF) has issued an initial approval of a $1.16 billion loan to Egypt as a part of its $5.2 billion Stand-by Arrangement with the government to support the North African's nation economic reform program.

"The IMF staff team and the Egyptian authorities have reached a staff-level agreement on the second review of Egypt's economic program supported by the IMF's $5.2 billion Stand-by Arrangement," head of the IMF mission to review the Egyptian economic program Ms. Celine Allard said in a statement on Tuesday following the conclusion of the 20-day mission.

"This agreement is subject to approval by the IMF's Executive Board, which will take place in the coming weeks. Upon approval, an additional SDR 1.16 billion (about $1.6 billion) will be made available to Egypt."

Allard held its virtual mission from May 4 to 24, 2021 with the Egyptian authorities. The mission held discussions on the 2021 Article IV Consultation with Egypt and the second review of Egypt's economic program supported by the IMF's 12-month Stand-by Arrangement.

In the statement, Allard said that over the past 12 months, Egyptian authorities’ strong performance and commitment helped achieve the program's objectives of maintaining macroeconomic stability during the pandemic while protecting necessary social and health spending and implementing key structural reforms.

“Egypt's economy has shown resilience, with the impact of the COVID-19 crisis mitigated by the authorities'' swift, and balanced policy response, including the two-step request for the IMF's Rapid Financing Facility and Stand-by Arrangement package of around USD 8 billion,” she noted.

The IMF team has also forecasted that Egyptian economy is expected to achieve a growth rate of 2.8 percent in FY2020/21, to rise to 5.2 percent in FY2021/22.

"However, uncertainty remains against the backdrop of lingering pandemic-related risks. Policies are appropriately focused on supporting the recovery in the near term while deepening and broadening structural reforms to unleash Egypt's enormous growth potential in the medium term," added the statement.